There is no right answer to the question: is my car an asset? The internet debates this topic endlessly. Personally, Mr. PFL and I haven’t included our vehicles in our net worth calculations. If we ever have car loans again, I imagine we will add in the car as an asset until the loan is paid off, and then probably remove it. Thankfully, any potential value in our cars is such a small percentage of our overall net worth that it doesn’t really make a difference at this point.
With all of that said, I’d like to take this opportunity to thank the brand new 2003 Toyota Corolla I purchased, with help from my dad, on Memorial Day Weekend 2002. The 2003 model was totally revamped from the old 90’s style Corollas. I was adamant that I buy the Toyota Corolla. At that time, Toyota was a very reliable car manufacturer; the Corollas were safe and fuel efficient; I was living more than 800 miles from my parents; and I had driven a string of beaters up to that point (1981 Chevy Impala, 1985 Ford Conversion Van, 1994(?) Ford Taurus, 1989(?) Mazda 626) and they weren’t reliable at all.
The purchase price of my new Corolla was in the neighborhood of $15,000; my dad made a small down payment and I financed $14,000. I made monthly car payments until June 2007 (I honestly don’t remember what my car payment was, but I remember it was less than $300/month, and probably about $270). There have been, of course, some issues along the way. Overall, though, this has been a great car.
The guys at the oil change place, which have been providing high mileage oil for about 100,000 miles, have told me for years that my car could hit 200,000 miles. Just last night, I cracked a milestone, and snapped a picture of it while stopped at a red light:
Don’t worry about that check-engine light; it has been on continuously since about 100,000 miles. Some sensor doesn’t work. A rough estimate from Kelley Blue Book, calling it “fair” condition (I do have a cracked windshield, am missing hubcaps, and have some dents/scratches, on top of that sensor issue, squeaking brakes and an interior that shows its age) puts the value somewhere between $2,000-$3,000. Not bad for a non-asset.
I hope this car continues to last. I can’t imagine having a car payment again (it has been almost 8 years for me, after all). I’d guess that we’d just pay for a car the next time we need one, but it all depends. I cannot imagine we’d choose a car that would require us to make an average monthly car payment, especially after learning that new cars are averaging a $471 monthly car payment and used cars are averaging a $355 monthly car payment.
I hope my Corolla will hold out long enough for my next car to be driver-less. Or a Tesla* becomes more affordable. Or maybe we live somewhere that a vehicle isn’t needed for anything. That’d probably be best.
*Mr. PFL owns shares of Tesla.